This summer Nestlé Health Science sold Prometheus Laboratories, a gastrointestinal disease diagnostics unit it had acquired eight years prior, to a low-profile San Diego biotech called Precision IBD.
About a month ago, Precision—a drug and diagnostic developer that’s focused, as its name suggests, on inflammatory bowel disease (IBD)—changed its name to Prometheus Biosciences and tapped a former Salix Pharmaceuticals executive as its new CEO. Top executive Mark McKenna spent about four years at Salix, a GI-focused specialty pharmaceutical company owned by Bausch Health (NYSE: BHC), formerly known as Valeant Pharmaceuticals.
Now the San Diego company has a deal with Japan’s Takeda Pharmaceutical (NYSE: TAK) to use its bioinformatics tools, plus diagnostics know-how it acquired from Prometheus Labs, to find up to three potential therapies for IBD, as well as companion diagnostics—tests that can indicate how well a patient is likely to respond to a certain treatment. Key to its plan to identify new drug targets for subgroups of patients with the disease is a dataset it has with more than 200,000 samples from about 20,000 patients, according to the company’s website.
Prometheus Bio aims to identify and validate a trio of new drug targets for Takeda to move into drug discovery and beyond. It received an undisclosed amount of money up front and, under the deal terms, could get up to $420 million in payments tied to potential milestones. As is typical in such deals, the agreement also allows for royalties from sales of any therapies that reach the market.
Since its launch in 2016, the company has raised nearly $33.8 million, including $20 million of a targeted $50 million round from two investors in July, right around the time it acquired the Prometheus business from Nestlé, according to regulatory documents.
This quarter the company plans to complete a Series C financing round, according to a press release it issued in September. Early next year, it’s hoping to add millions more to continue funding its work; the company is eyeing a 2020 public market debut, according to the release.